| September 12, 2022 | | | |  | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Lead Stories | | | CME Group Launches Ether Options
Will Feuer - MarketWatch
Derivatives marketplace CME Group Inc. said it is launching options contracts on futures tied to the cryptocurrency Ether.
The company said the new contracts will deliver one Ether futures, sized at 50 Ether per contract, based on the CME CF Ether-Dollar Reference Rate, which serves as a once-a-day reference rate of the U.S. dollar price of ether.
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Forced Buying Puts a Floor Under Stocks Nobody Else Wants to Own; Short sellers, options hedgers, quants seen driving an up week; Retail and fund outflows show growing risk aversion amid Fed
Lu Wang and Isabelle Lee - Bloomberg
In a week that saw discretionary buyers beat a quick retreat from risky assets, another set of traders stood up to halt a three-week plunge in the S&P 500: those with little choice but to buy. They included short sellers, whose rush to cover lifted stocks they're betting against to gains of more than twice the market's. Options dealers were another bullish force after getting caught needing to boost hedges by buying stocks when they rise. Certain quantitative traders for whom chart thresholds are a call to action also made their presence known.
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Traders see inflation falling for rest of 2022, but that likely won't end Fed rate hikes or market volatility
Vivien Lou Chen - MarketWatch
There's a bit of good and bad news in the run-up to the next major U.S. inflation data on Tuesday, following July's bigger-than-expected decline in the U.S. consumer-price index which triggered a short-term relief rally among stock investors.
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From Zero to 100: Crude Oil Price Changes in 2020 - 2022; Analyzing the Market Microstructure Implications of Oil Futures and Spot Prices for Market Participants
National Law Review
This article looks at how the escalation of the Russo-Ukrainian conflict and the ongoing response to the COVID-19 pandemic contributed to crude oil price volatility and a surge to over $120 a barrel in 2022. These high price levels, which have not been seen since 2008, occurred just two years after hitting an all-time low early in the pandemic and going into negative territory in April 2020. The article focuses on the market microstructure implications for futures market participants and how the prices have diverged between various global crude oil benchmarks.
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Brussels ignores derivatives at its peril amid energy crisis; Politicians and regulators have failed to plan sufficiently for the shock so far but there are steps they can take
Gillian Tett - Financial Times
When European leaders meet in Brussels on Friday to tackle the continent's energy crisis, politicians will be focused on windfall taxes and energy price caps. And no wonder: spiralling electricity costs are creating mounting pain for households and businesses â and political upheaval. However, investors should keep an eye on another item on the agenda: their approach to energy derivatives markets, clearing houses and exchanges. This might seem arcane but the issues now bubbling in the derivatives sphere represent another potential time bomb for Europe â one that needs to be urgently addressed.
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Legendary investor Jeremy Grantham warns the S&P 500 could plunge another 26% - and reveals he's shorting the Nasdaq and junk bonds
Theron Mohamed - Business Insider
Jeremy Grantham warned the S&P 500 could plummet by another 26% in the next year, as financial markets face an unprecedented confluence of challenges. He also revealed he's betting against the Nasdaq index and junk bonds.
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Finance Chiefs Struggle to Set Guidance as Economy Flashes Mixed Signals
Jennifer Williams-Alvarez - WSJ
Finance chiefs are finding it harder to peg yearly guidance as they struggle for visibility on the direction of the economy, leading them to broaden their annual revenue ranges and revise spending plans more frequently.
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| | | | | | Exchanges | | | CME Group Announces Launch of Ether Options
CME Group
CME Group, the world's leading derivatives marketplace, today announced the launch of options on Ether futures.
"As market participants anticipate the upcoming Ethereum Merge, a potentially game-changing update of one of the largest cryptocurrency networks, interest in Ether derivatives is surging," said Tim McCourt, Global Head of Equity and FX Products, CME Group. "The launch of our new Ether options contracts is particularly well-timed to provide the crypto community with another important tool to gain access to and manage exposure to ether. Our new options contracts will also complement CME Group's Ether futures which have seen a 43% increase in average daily volume year over year."
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Resources related to Queen Elizabeth II's state funeral
FIA
FIA has created this page for members as a resource for information related to market closures caused by Her Majesty Queen Elizabeth II's State Funeral on Monday 19 September.
The accompanying text is a non-exhaustive list of governmental and exchange announcements that may be of interest to participants in futures and derivatives markets. Nothing on this page should be taken as legal advice and members should consult their legal and other professional resources on individual needs.
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Market for Underlying Security Used for Openings on MIAX Options, MIAX Pearl Options and MIAX Emerald Options for Symbol PR Effective Monday, September 12, 2022
MIAX
Permian Resources Corporation ("PR") has transferred primary listing from NASDAQ to the New York Stock Exchange ("NYSE") effective Monday, September 12, 2022.
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NYSE Arca Options: Changes to Trading Collars Effective September 21st
Effective September 21, 2022, the following Trading Collar parameters will apply pursuant to Rule 6.62P-O(a)(4)(C).
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Re-Introduction of An Option Class
TMX
BetaPro Natural Gas Inverse Leveraged Daily Bear ETF (HND) Bourse de Montréal Inc. (the Bourse) and Canadian Derivatives Clearing Corporation (CDCC) hereby inform you that at the opening of trading on Tuesday September 13, 2022, the following
new option series on the above-mentioned option class will be re-listed.
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| | | | | | Regulation & Enforcement | | | U.S. Justice Dept. short-selling probe looks at trading in Amazon, Microsoft, JPMorgan, Bloomberg News reports
Bloomberg
The U.S Department of Justice has subpoenaed some short sellers for trading information on firms including Amazon.com Inc (AMZN.O), Microsoft Corp (MSFT.O) and JPMorgan Chase & Co (JPM.N), as part of a short-selling probe, Bloomberg News reported on Monday.
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| | | | | | Strategy | | | Record Option Flow in 3M as Traders Positioned for Spinoff
Henry Schwartz - Cboe
According to Trade Alert data, nearly 3 million option contracts traded in 3M (MMM) between August 25 and September 6, 2022, a level 18 times higher than recent average levels. Additionally, open interest grew by more than 1.4 million to a record 1.95 million contracts. A closer analysis of order flow shows that the unusual volume can be attributed to an arbitrage strategy ahead of 3M's August 31 tender to spin-off its Food Safety Business and merge it with Neogen (NEOG). Terms of the offer are here.
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Looming Fuel Shortages Make Investors Bullish on Energy Stocks and Bonds
Nour Al Ali and Grant Smith - Bloomberg
Energy stocks and bonds are poised to get a fresh boost from investors positioning to benefit from the surging electricity prices and fuel shortages expected later this year.
Two-thirds of respondents to an MLIV Pulse survey -- which includes portfolio managers and retail investors -- plan to increase exposure to the sector over the next six months. They see electricity and natural gas prices driving global inflation and expect that Russia will choke off flows of natural gas to Europe, leading to shortages of key fuels this winter.
/jlne.ws/3U2nHYI
Hedge Volatility With These ETFs
Sweta Killa - Nasdaq
Volatility has hit the stock market once again, making investors jittery. Fears of an aggressive rate hike by the Fed and global growth concerns have resurfaced.
In such a scenario, investors should apply some hedging techniques to their equity portfolio. While there are a number of ways to do this, volatility-hedged ETFs like iMGP DBi Managed Futures Strategy ETF DBMF, Amplify BlackSwan Growth & Treasury Core ETF SWAN, Invesco S&P 500 Downside Hedged ETF PHDG, Aptus Drawdown Managed Equity ETF ADME and First Trust Managed Futures Strategy Fund FMF could prove beneficial amid market uncertainty. Investors should note that these funds have the potential to stand out and outperform simple vanilla funds in case of rising volatility.
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| | | | | | Education | | | LEAPS Options: What They Are and When to Use Them
Wayne Duggan - U.S. News
The popularity of options trading has reached an all-time high, with a record 39 million total contracts traded in 2021. While options trading can be extremely profitable and rewarding, it is also risky for inexperienced investors. In fact, researchers estimate retail option traders lost a collective $1.14 billion during the COVID-19 pandemic from November 2019 through June 2021.
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| | | | | | Events | | | Global Risk Management Conference
Cboe
We're back and bigger than ever with the leading Global Risk Management Conference sure to leave you energized and empowered with perspectives on trading and investing strategies.
Join your fellow traders, investors, strategists and researchers to learn about the latest products and strategies for managing risks, enhancing yields and managing volatility.
Reykjavik, Iceland, October 17 - 21, 2022
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| | | | | | Miscellaneous | | | Where's US Inflation Heading? If You Want to Know, Look at Rents
Matthew Boesler - Bloomberg
The Federal Reserve's attempt to get a clean read on post-pandemic inflation has focused attention on gauges that elevate housing costs, which is why what happens to rental inflation will factor heavily into the future of monetary policy.
The good news is rental inflation may be close to topping out after advancing almost 6% in the 12 months through July. The bad news is it will take a while to settle back down to anything resembling pre-coronavirus norms.
And that means Fed officials will maintain high interest rates for some time.
/jlne.ws/3QCgHig
Wall St jobs are hot again as tech and crypto sectors lay off staff
Nicholas Megaw - Financial Times
After years of fighting to attract computer engineers who would rather work for big tech groups or crypto start-ups, Wall Street firms say they are recovering lost ground in the talent war as lay-offs and hiring freezes spread through Silicon Valley.
With exchanges, banks and market makers continuing to expand through the recent market downturn, executives say their relative stability has made them more appealing destinations.
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Editor
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